Not Today, Gary: Court Says XRP Is Not A Security

On July 13, Judge Analisa Torres, district judge for the United States District Court for the Southern District of New York, issued a substantial order (the Order) on cross motions for summary judgment in the U.S. Securities and Exchange Commission v. Ripple Labs case (SEC v. Ripple), which breathed new life into the cryptocurrency ecosystem.

Buried within the legal and procedural language of the Order, Torres declared that "XRP, as a digital token, is not in and of itself a 'contract, transaction, or scheme' that embodies the Howey requirements of an investment contract." Translation–XRP is not a security.

While the Order addressed a number of issues, the key takeaway is that a digital asset like XRP may be a commodity on its own, especially when traded on centralized or decentralized exchanges. However, the same digital asset may be deemed a security depending on how and to whom it is sold or distributed.